Cost of Minimum Income Guarantee to be Rs 7 Lakh Crore

The
cost of minimum income guarantee for one person in the country could
be more than Rs 7 lakh corer for 25% for low-level households, the
primary estimation of the government revealed.

The
calculation was made by considering the minimum wages of a person of
Rs 321 for a day which on the further calculation for a month
estimated to Rs 9,630, compulsory for the skilled farm workers of the
Centre. The cost was predicted to be more than Rs 5 lakh crore, only
if 18- 20 percent of the households were targeted, the indication was
made by the former Finance Minister P Chidambaram during an interview
soon after this, his party chief Rahul Gandhi announced the Minimum
income guarantee plan if they have been voted and bought back to
power in the Lok Sabha election that is going to take place in 2019.

The
Congress President did not mention the detail explanation about the
plan.

The
cost of executing the scheme for the poorest section of the community
by offering a fixed amount was observed as a staggering block which
would demand a strong financial burden along with the subsidies that
the government is currently providing, beginning from the food, and
fertilizers to an array of concessions on loans.

Difficult
to Executes Schemes due to Cost Implication

According
to the Economic Survey suggestion, two years back the global basic
income was around Rs 7,620 a year to 75 percent of the households,
this was not implemented due to cost implication and due to
governments’ incompetence to remove subsidies for the weaker
section and middle-class people of the society. Although the survey
had evaluated the cost to be at 4.9 percent of GDP, the evaluation
recommended that the cost could be around Rs 2.4 to Rs 2.5 lakh crore
per year if 5 members belonging to 25 percent poorest household were
guaranteed a minimum income. Providing Rs 3,180 per month to five
members of the households could further cost the government Rs 1.75
lakh crore only if the plan was limited between 18-20 percent of the
overall population.

There
were issues for implementing the plan, particularly about the
identification of the households. However the former chief economic
adviser Arvind Subramanian trusted that the plan could be achieved.
The document had recommended excluding people with ACs cars or bank
balance more the certain level from the scheme. It had backed a
naming and shaming policy by forming a list of public beneficiaries
along with receiving formal statements regularly from the
beneficiaries.

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